The franchise agreement is due for renewal in June-July, 2006 but its uncertain whether they will renew the tie-up.
Market sources say ITCs next management contract could be with either Shangrila or Radisson. Only 10 of ITCs 60 hotels are branded Sheraton which markets these as ITC-Welcomgroup hotels worldwide.
ITCs Hotel division was launched in 1976 with the opening of its first hotelChola Sheraton in Chennai. In case ITC is unable to tie up a marketing contract for Sheraton branded hotels, it may have to go for an interim re-branding till it finds another partner.
An ITC Hotels spokesperson told FE that its contract for the use of the Sheraton brand will come up for renewal this year and it has yet to take a decision. It would be wrong to say that the contract has been terminated.
The contract has come up for renewal in the normal course of time some time this year and is under discussion, the spokesperson said, adding that an announcement would be made one or two months from now.
Parting time for a long stay guest
Sources close to ITC say that relations with the Sheraton Corporation may have started to turn sour around early 2004. ITC and its units run 66 hotels in more than 50 locations in the country, more than any company, except Indian Hotels Co, which has 70 properties in India and overseas.
Taking note of the development, the ITC stock closed at Rs 145.40, down Re 1.40 or 0.95%. It opened at Rs 147.30, touched a high of Rs 147.90 and a low of 144.50.
Networth Stock Broking research analyst Rati Pandit said, ITC doesnt need a foreign partner to market itself. But there could be some changes in their marketing strategies if at all the two part ways.